Misclassifying a Worker as an Independent Contractor
Hypothetical: Sally owns Sally’s Baked Goods With Muffins, LLC. Sally uses independent contractors for her baking. That way, she does not have to provide workers compensation, pay taxes on her workers, and it provides her with the flexibility to terminate a worker without worrying about all of those “pesky employment laws.” One day, her best worker, Barb gets hurt on the job. Now, Barb is demanding that Sally cover the cost of her medical care and the time that she is off of work. Sally decides that she needs to seek the advice of a business attorney.
The business attorney explains to Sally that misclassifying a worker as an independent contractor has serious consequences. The seriousness of misclassifying a worker as an independent contractor increased in Minnesota in 2019 when a bipartisan legislature passed sweeping wage and hour “reform” laws. As part of these laws are increased penalties for wage theft, which includes misclassifying a worker as an independent contractor. Employers in Minnesota should be extremely concerned about the potential of violating the wage theft laws, which have both civil and criminal consequences.
Spangler and de Stefano, PLLP represents businesses regarding the classification of workers.
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